Tata Sons to invest upto Rs 10k crore in Group cos

Chandrasekaran's rise to the top job at the 149-year-old conglomerate in February followed a battle for control after former chairman Mistry was unexpectedly ousted in October last yearMegha Mandavia | March 29, 2017, 08:14 IST

Among the first decisions taken by N Chandrasekaran as chairman of Tata Sons was to tighten the holding company's control over the $103-billion conglomerate, recently shaken by a power struggle between Cyrus Mistry and Ratan TataThe Tata Sons board approved a resolution to invest up to Rs 10,000 crore in various Tata group companies at the first board meeting chaired by Chandrasekaran on February 21.

“Resolved that approval of the board of directors be and is here by granted to the company to invest amounts not exceeding Rs 10,000 crore for subscribing to issues of securities and or purchasing securities in various companies of which Tata Sons is the promoter and or a shareholder,"according to the resolution, a copy of which has been filed with the ministry of corporate affairs.

The filing did not give any reasons or mention the companies that would be invested in. The board, on the same day, also decided to raise up to Rs 7,000 crore by selling corporate bonds to refinance existing debt, invest in securities or provide loans to companies.The fund raising could be done in one or more tranches. “We do not share information on such matters. Suffice it to say that, from time to time, Tata Sons raises funds as part of its ongoing activities," Debasis Ray, Tata Sons group spokesperson, told ET in an email.

Chandrasekaran's rise to the top job at the 149-year-old conglomerate in February followed a battle for control after former chairman Mistry was unexpectedly ousted in October last year. The board said it had lost confidence in his leadership, naming Ratan Tata as interim chairman before Chandrasekaran was picked as a permanent replacement.

Mistry has launched a legal battle against the Tatas at the National Company Law Tribunal. The Shapoorji Pallonji group, owned by Mistry's family, has an 18.4% stake in Tata Sons.

During the fight for control, Mistry refused to step down from the chairmanship of listed Tata companies. Ratan Tata had to rely on Tata Sons' shareholding and the support of institutional investors to remove him from these boards.

Tata Sons, an investment holding company of the Tata Group, holds shares in more than 100 Tata companies, including 29 publicly listed enterprises that have a combined market capitalisation of about $116 billion.